You might see an Amazon package next time you visit the bodega, the florist, the coffee shop, or any one thousands of other small businesses that will deliver packages in 23 US states as part of an effort by the company to beef up its “Amazon Hub Delivery” program. The expansion is the latest attempt by Amazon to turn to outside partners to cut delivery times and costs in the historically expensive “last mile” of shipping.
The program, first reported on by Axios and confirmed by an Amazon spokesperson, will include at least 20 denser cities like New York, Boston, Los Angeles, and Seattle. Participating small businesses will receive packages from Amazon in the morning and then are expected to make between 20-50 deliveries per day, seven days per week for a total earnings of $27,000 per year, according to Axios. Amazon told Axios it plans to partner with 2,500 small business drivers to deliver packages by the end of the year.
“This unique partnership opportunity empowers businesses to launch a package delivery service offering with no upfront costs or long-term contracts,” Amazon says on its website. “Powered by Amazon’s technology, the Amazon Hub Delivery program allows businesses to earn extra income with every successful package delivery to their local community.”
Participating small business partners reportedly won’t need any prior experience making deliveries. Drivers, according to Amazon, will have to undergo a background check and will use their own vehicle to make deliveries in most cases. Amazon’s expanded rollout follows a 2020 pilot program focused primarily in rural areas. Prior to that, Amazon launched a similar program called “I Have Space” in Spain and India.
“We get more people coming in, we were able to increase our inventory, we were able to start a coffee cart, and upgrade our flower van,” Hillary Herrington, one of the partners in the pilot program and owner of Herrington’s The Florist in Brewton, Alabama said. “They wanted to take a gamble on us and we took a gamble on them and it just worked out.”
Amazon revamps delivery network
The Hub Delivery Program is one of several new efforts by Amazon to cut down delivery costs across the country as demand for next-day and same-day delivery continues to tick up. Amazon recently radically revamped its US shipping system, moving away from a single national model and towards eight self-sufficient regions. This focus on smaller geographic regions means customers are more likely to receive a package that starts out in a warehouse close to them. That reduction in travel distance cuts down costs for Amazon and potentially speeds up deliveries for customers.
Similarly, the company has invested even more resources into ultra-fast same or next-day shipping to meet demand. An Amazon spokesperson told The Wall Street Journal earlier this year they estimate more than 1.5 million customers per month are trying out same-day shipping for the first time. That investment also comes partly in response to renewed competition from Target and Shopify, which have collectively announced plans to invest over $100 million to ramp up shipping speeds.